If you owe tax and don’t pay the IRS on time and in full, you could face a penalty on the unpaid tax. Penalties may also be assessed if you fail to file an accurate and on-time income tax return or information return, or if you make an erroneous claim for a credit or refund. Businesses may be penalized if they neglect to deposit correct employment tax payments on time. In general, if you don’t pay a penalty by its due date, it will accrue interest. Interest will increase the total amount you owe until you pay the balance in full. That said, the IRS may reduce or remove a penalty if you can prove you had reasonable cause and acted in good faith.
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